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... anticipated price level is higher than they expected but will be unable to do anything about it until they renegotiate their contracts. • Keynesian economists today put forth microeconomic-based reasons why long-term labor contracts and above-market wages are sometimes in the best interest of both e ...
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... Joe sold gold coins for $1,000 that he bought a year ago for $1,000. He says, "At least I didn't lose any money on my financial investment." His economist friend points out that in effect he did lose money because he could have received a 3 percent return on the $1,000 if he had bought a bank certif ...
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Colombia_en.pdf

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ECON 3560/5040 Homework #6 (Answers)

... of firms with sticky prices. Other things being equal, if a greater proportion of firms follows the sticky-price rule, what happens to the slope of the AS curve? The slope of AS curve ( α1 ) increases (decreases) as the fraction of firms with flexible prices increases (decreases) in the sticky-price ...
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... working insecure and the poor, ‘have shared in around half of the misery of the jobless’. There is little evidence to support the contention that the unemployed are a bunch of lazy scroungers; the evidence is that Marx’s reserve army of the unemployed is a conscript army and not a volunteer army. Ev ...
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... GDP and the Business Cycle • During a period of growth, GDP goes up and in a period of contraction, GDP goes down. • This pattern of a period of expansion followed by a period of contraction is called a business cycle. – Changes in the business cycle take place because individuals and businesses, a ...
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... Patents and their conflicting effects on growth:  Increasing growth by creating incentives for innovation  Decreasing growth by limiting usefulness of common knowledge and can be effective barriers to prevent potential new competitors from entering a market Ch. 9 Until the Depression, the dominant ...
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Business cycle

The business cycle or economic cycle is the downward and upward movement of gross domestic product (GDP) around its long-term growth trend. These fluctuations typically involve shifts over time between periods of relatively rapid economic growth (expansions or booms), and periods of relative stagnation or decline (contractions or recessions).Used in the indefinite sense, a business cycle is a period of time containing a single boom and contraction in sequence.Business cycles are usually measured by considering the growth rate of real gross domestic product. Despite being termed cycles, these fluctuations in economic activity can prove unpredictable.A boom-and-bust cycle is one in which the expansions are rapid and the contractions are steep and severe.
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